Leeds Building Society, a prominent UK lender, has embarked on a trial initiative to suspend new holiday-let mortgages in select popular tourist destinations, aiming to address concerns raised by campaigners regarding housing availability in affected areas.
The move comes in response to mounting pressure regarding the proliferation of short-term holiday lets, which critics argue have contributed to local residents being priced out of their communities. The surge in properties converted into holiday rentals, facilitated by platforms like Airbnb, has exacerbated housing affordability challenges, particularly in regions such as Norfolk and Yorkshire.
This development coincides with the recent unveiling of new government regulations targeting short-term holiday lets in England, signaling a broader effort to regulate a sector perceived by some as “out of control.” Under the proposed rules, future short-term lets will require planning permission, and a mandatory national register will be established to provide local authorities with comprehensive data on short-term rental properties.
Leeds Building Society, in collaboration with North Norfolk District Council and North Yorkshire Council, will implement a 12-month trial starting from the end of March. This trial will entail a temporary cessation of new holiday let mortgage lending in designated areas, aimed at curbing further expansion of the holiday rental market.
The affected regions include popular coastal towns such as Cromer, Wells-next-the-Sea, and Sheringham in North Norfolk, as well as Scarborough, Whitby, Filey, Saltburn, Leyburn, and Richmond in North Yorkshire. Postcodes corresponding to these areas will be flagged within the building society’s systems to prevent the approval of any new holiday let mortgage applications during the trial period, while existing borrowers remain unaffected.
Holiday let mortgages, distinct from traditional buy-to-let arrangements, cater to properties intended for short-term rental purposes rather than long-term occupancy. While Leeds Building Society estimates its position among the top 10 lenders offering such mortgages, it is noteworthy that some lenders include holiday let mortgages within their buy-to-let loan portfolios.
Ben Twomey, Chief Executive of Generation Rent, lauded Leeds Building Society’s initiative, emphasizing the prioritisation of housing needs over leisure pursuits. The move underscores a growing recognition of the imperative to balance the demands of the holiday rental market with the preservation of local housing affordability and community integrity.